Why is Walmart PS5 More Expensive? Demand-Supply Imbalance and Resellers Driving Up Costs

As a passionate gamer closely tracking the PS5 availability situation, I‘ve been fielding lots of questions recently around why Walmart‘s PlayStation 5 pricing often appears so exorbitantly high. Based on my extensive research into the PS5 retail market, there are a few key factors at play driving up costs:

Walmart PS5 pricing is primarily inflated by third-party resellers charging ridiculous premiums to exploit the severe supply shortages Sony is facing. When Walmart directly sells retail inventory of PS5s, its prices are competitive and affordable.

But the painfully limited supply compared to towering demand globally has created prime conditions for price gouging by opportunistic resellers peddling marked up units. Let‘s analyze why these opportunists can pull off such brazen pricing, why the PS5 remains so hard to find even years after launch, and what the best purchasing strategies are.

Why Resellers Can Get Away with Price Gouging

The most basic economic principle explains how tech resellers are able to routinely charge $800 to even $1,500 for a $500 console – the equilibrium of supply and demand is totally lopsided.

Sony has sold more than 30 million PS5 units globally since launch, with over 15 million sold just in 2022 even amid production woes. The US accounts for around 5-6 million of these shipments based on analyst estimates. Yet every new allocation still vanishes instantly.

This gives you a sense of just how desperate and eager the world‘s 2+ billion gamers are to get their hands on a next-gen device. Against this environment, opportunists using bots and other tools to sweep up what little inventory trickles out are able to dictate wild pricing.

By contrast, when Walmart does get retail stock, they price it very reasonably – the discounted bundles including games and accessories they offer during holiday sales represent arguably the best deals out there.

So why doesn‘t Walmart clamp down on resellers marching higher and higher asking prices for the PS5 on its marketplace? The reality is these third-party vendors still represent incremental revenue. As long as desperate shoppers keep purchasing from them, Walmart has little incentive to curb this behavior that squeezes more value from limited supplies.

Global Crises Constraining PlayStation Production

The natural question following is why has Sony struggled so badly to produce anywhere close to sufficient stock more than two years since the PS5‘s launch? The short answer is a series of black swan events ranging from the pandemic to the Ukraine war have severely hampered production capabilities.

Industry analysts point to the perfect storm of surging demand with gamers stuck indoors combined with collapsing supply as factories in China and Taiwan contend with repeated COVID disruptions. Apple, Microsoft, and many other hardware makers have faced similar shortfalls resulting in supply deficits measured in the hundreds of millions of units.

Specifically for Sony, the sophistication of the PS5‘s components has exacerbated production bottlenecks. The state-of-the-art AMD processor and advanced cooling systems require cutting edge semiconductors using 7nm and smaller process nodes – these are in severely short supply with lead times stretching into late 2023.

Here is a snapshot of various critical components integral to PS5 manufacturing and how badly availability has degraded based on monthly global order data:

Attempting to shift sourcing or redesign at this scale for a product as complex as the PS5 simply isn‘t feasible either. Even expanding production fully for 2023 looks unlikely to meet demand levels according to multiple reports.

So in summary, between the events of the past three years culminating in severe technological component shortages and repeatedly muted manufacturing output, Sony looks highly unlikely to fulfill more than a fraction of PS5 orders in any given sales period for the foreseeable future.

Impact of Runaway Inflation Driving Up Sony‘s Costs

As if worldwide supply chain chaos wasn‘t enough to deal with, the background environment of runaway inflation and deepening economic erosion has only exacerbated input costs for Sony from all angles.

• Baseline material costs have spiked drastically: key ingredients ranging from copper to lithium critical for electronics manufacturing are up between two to 10X over the past 18 months
• Logistics and transportation costs have ballooned: marine freight pricing has escalated up to 5-7X during peak periods as fuel costs erupted
• Rising interest rates and currency fluctuations: the surging dollar coupled with climbing corporate borrowing rates has magnified overseas costs
• Labor costs and wages rising: inflation drives up workforce and production costs, especially acute in electronics manufacturing hubs

In August 2022 when Sony announced the nearly 10% PS5 price hike from $499 to $549, they were abundantly clear that rampant cost escalations made this step unavoidable. With rates continuing to rise into 2023, expect further increases.

Best Practices for Walmart PS5 Purchases

Given the macroeconomic headwinds Sony faces to meet demand along with ruthless opportunistic resellers ready to exploit scarcity, what should the average gamer trying get their hands on PS5 for a reasonable price do?

Here is the expert guidance I can offer as someone actively tracking stock updates across retailers in order to snag PS5s for myself and friends at close to retail pricing when inventory does sporadically become available:

• Pounce immediately at restock opportunities: given the feed frenzy whenever new console allotments appear, usually online, you need lighting quick reflexes and persistence
• Follow tracker accounts and setup mobile alerts: services like ZooLert are invaluable for getting immediate restock notifications the moment they are live
• Be open to pricier bundles: while bundles with games/accessories can be $200+ premiums over standalone console cost, they are easier to successfully claim
• Avoid resale listings: third-party offers may convenience but astronomical markups erase any value
• Keep trying across retailers: aggressiveness across Walmart, GameStop, PS Direct sites boosts probability of bagging an order

Trust me, the warp speed sellouts make it extremely tough. But grit, savvy, and speed when jump on a Walmart opening can still yield PS5 gold without paying the prices demanded by shameless resellers. With some luck and refusal to overpay, having an incredible next-gen console under your TV for the cost Sony intended can absolutely still happen.

In closing, the exorbitant costs of $800+ for a PlayStation 5 on Walmart‘s platform stem entirely from the actions of third-party resellers moved in to exploit extreme supply shortages. Pandemic ripple effects drastically suppressing production capacity combined with runaway inflation constitute the core drivers stretching PS5 lead times indefinitely.

Yet for the vigilant gamer closely tracking restock announcements across retailers, pouncing on fleeting Walmart retail inventory at regular prices remains possible. Avoid reseller offers, act decisively on restocks, and brace for the long journey – with this guidance, you can still land Sony‘s marvelous gateway to next-gen gaming without paying more than what this top-tier hardware warrants.